POSTINGS; A Happy Ending for a Troubled Building

By NADINE BROZAN

Published: October 17, 2004

Correction Appended

TO all but the most untutored eye, the abstract curlicue design etched into the transom over the front door at 789 MacDonough Street in Brooklyn is simply decorative.

But it is, in fact, a West African tribal symbol for strength, a quality residents have needed in abundance over the more than two decades that their building sank into debt and decay and faced foreclosure.

Now they have cause to celebrate. Through their own perseverance and with the help of the city and the Urban Homesteading Assistance Board, their home, a 41-unit, six-story limited-equity co-op in the Ocean Hill-Brownsville section of Brooklyn, is back on sure footing.

The building is the first to benefit from legislation enacted two years ago by the state that forgives real estate tax debts, interest and penalties accrued before Jan. 1, 2001, by limited-equity cooperatives. The co-ops have income ceilings for tenants, who in turn can sell their units for only a limited profit.

To qualify, the buildings, acquired by the city through tax foreclosures and then sold to former renters for $250 an apartment, must agree to comply with a set of regulations and be subject to oversight by the city's Department of Housing Preservation and Development.

''With property values up, it would be easy for someone to come in, pay the back taxes and systematically remove the residents who are, for the most part, working class or poor and principally minorities,'' said Vito Lopez, chairman of the Housing Committee of the State Assembly and author of the bill. ''The city has now given up a prospective $20 million to $30 million in property taxes to save 4,500 units of housing, all in poor and marginal communities that are starting to change. It is imperative to allow people who lived there in difficult times to stay.''

There are about 950 of the limited equity co-ops, known as Housing Development Fund Corporations, in the city, of which 175 are eligible for tax relief, according to Department of Housing Preservation and Development. So far, 10 have gained approval.

Like numerous other buildings with tax arrears, 789 MacDonough Street has had a troubled history, neglected by landlords before the city took over in 1977 and by managers appointed by community agencies since then.

''For five years, we had no elevator, no heat and no repairs,'' said Deborah Nunez, a resident of 40 years and vice president of the board, who is employed as a purchasing manager for the District Council 37 union.

In 1989, the tenants bought the building for $10,000, the standard price for the low-income co-ops, no matter what their size. One manager after another was brought in to run the property, but like their predecessors, neglected the building and dodged its tax assessments and water bills.

''In 1999, we learned we were going into foreclosure because we owed more than $360,000, said Emma Oliver, president of the board, who is a retired registered nurse. ''We trusted people. We didn't know the taxes weren't being paid.''

The Urban Homesteading Assistance Board, a nonprofit technical assistance organization, stepped in to help residents apply for loans from the National Cooperative Bank and the city and acquire some grants.

''There was no tax relief at the time, but they were determined to save the building even if it meant borrowing $450,000,'' said Ann Henderson, the board's associate director for co-op preservation. The tax relief legislation passed, reducing the loan from the Cooperative Bank to $240,000.

An additional loan for $230,000 from the Department of Housing Preservation and Development was used to steam-clean and repoint the brick facade, repair masonry, install a new sidewalk and elevator, upgrade the boiler and spruce up the lobby.

''I've seen the good, the bad -- and now the beautiful,'' said Constance Wesley, Ms. Nunez's 76-year-old mother, who moved into the building in 1964. ''It was heartbreaking what we went through. All we wanted was a livable place with service. This is so much more.''

Big Deal will return on Oct. 24.

Photo: FINANCIALLY SOUND -- Building owners at 789 MacDonough Street in Brooklyn have benefited from state legislation that forgives certain real estate tax debts. (Photo by Don Hogan Charles/The New York Times)

Correction: October 24, 2004, Sunday
Because of an editing error, the Postings column last Sunday, about state legislation that forgives certain tax debts for limited-equity co-ops in New York City, misstated the standard price that tenants are charged for many buildings acquired by the city through tax foreclosures. It is $250 per unit, not $10,000 per building.